House panel kills 'black liquor' bill

Phase-out of paper mill subsidy had passed Senate

Paper mill in Luke owned by New Page Corp. would have retained… (Doug Kapustin, 2008 )

March 29, 2013|Tim Wheeler

Legislation that would have phased out millions in ratepayer-financed subsidies for mostly out-of-state paper mills died in a House committee Friday, just a day after the Senate passed a companion measure.

The House version of the so-called "black liquor" bill, HB1102, fell one vote short of the 12-vote majority needed to get out of the Economic Matters Committee. The vote in the panel was 11 to 8 for it.

The Senate had voted 33-13 on Thursday to end the subsidies, after the bill had died and been resurrected in committee.

Del. John A. Olszewski Jr., the House bill's sponsor, said lawmakers had been lobbied hard by paper industry representatives and by the unions that represent the mills' workers, noting that "there's quite a bit of money at stake."

"I think labor played a pretty big role in the vote," the Baltimore County Democrat said, noting that even some of the bill's cosponsors did not support it. Olszewski said he was a "labor guy" as well but saw this as a matter of ending subsidies paid for by Maryland ratepayers to out-of-state paper mills.

The bill would have ended in five years lucrative renewable-energy "credits" that paper mills receive for burning a byproduct known as black liquor and other wood waste. Maryland's renewable energy law requires power companies to get some of their energy from renewable sources, and paper mills can sell their credits to meet those obligations.

All but one of the mills getting the credits is out of state, and sponsors had agreed to amend the bill to protect the one in-state facility in Luke in Allegany County, owned by Ohio-based New Page Corp. Despite that, the company and its union representatives joined the rest of the industry in opposing the phase-out.

"It was just one of those things where an affront to one is an affront to all," Olszewski said of the in-state labor opposition.

He vowed not to stop pushing to end the subsidies, which he and others argue are crowding out "true" solar and wind renewable energy projects.

"The imperative to fix this is only going to grow," he said, as prices paid for renewable energy credits rise. The prices already have jumped in recent years, according to James McGarry of Chesapeake Climate Action Network, who estimated that paper mills are in line to receive more than $20 million this year alone.